Cathay Pacific’s U.S. Based Flight Attendants Want To Unionize

Cathay Pacific has foreign flight attendant bases, including some in the U.S. Actually, they’re the only Asian airline I know of to have U.S. based flight attendants.

I’ve flown with Los Angeles, New York, and San Francisco based Cathay Pacific crews. In some cases flights are entirely staffed by U.S. based crews, while in other cases they mix the staffing on a flight, and have crews that are part U.S. based and part Hong Kong based.

In my experience, in general U.S. based crews are more informal and fun, while Hong Kong based crews tend to be a bit more proper and poised. However, sometimes it’s tough to tell the difference between flight attendants based on where they’re based, since it’s not like the U.S. based flight attendants are exclusively American, and it’s not like the Hong Kong based flight attendnats are exclusively from there.

For example, Cathay Pacific has a lot of Filipino flight attendants, and in many cases the Hong Kong based flight attendants actually live in the Philippines and commute, while the US based ones in many cases were born and raised in the Philippines and have lived in the US for some amount of time.

Anyway, I apologize for the tangent, because I’m always fascinated by the nationalities of airline crews. Now let’s get to the real point of this post — Cathay Pacific has stopped contributing to social security and medicare for U.S. based flight attendants, and they’re now seeking to unionize.

U.S. Cathay Pacific crews are losing benefits

The South China Morning Post reports that Cathay Pacific has stopped contributions to social security and medicare for their 400+ U.S. based cabin crew… apparently because they’re not allowed to. Here’s the explanation:

The airline says that for several years it had mistakenly contributed to a benefits scheme provided by the US government. Now Cathay has told the employees that it is exempt from such payments as it is a non-American employer with staff working on non-American registered aircraft.

“We understand that we have no alternative but to comply with the US tax law and regulation,” the airline told staff in a letter.

The change in policy means Cathay will save US$1 million a year in employee related contributions, according to a leaked email. However, it denied the move was motivated “due to any cost concern”.

Crew who made social security contributions over recent years, typically 6 or 7 per cent deducted from their salaries, could get a refund but they would not then be eligible for the benefits.

Cathay Pacific’s U.S. based flight attendants want to unionize

I’m not sure if this is directly related to the above situation, or if the above is just the straw that broke the camel’s back, but Cathay Pacific’s U.S. based flight attendants are asking for an election so that they can be represented by a union.

“We are excited for Cathay U.S.-based Cabin Crew to join with us to raise the standards for all Flight Attendants. Their Cathay Cabin Crew counterparts in Hong Kong, the United Kingdom and Canada all have contracts with higher pay, benefits and job security. It’s past time for these hard-working American-based Flight Attendants to have a contract too. Together we will work to deny multi-national corporations from undervaluing our work. This election is about equality and fairness. It matters to Flight Attendants in the U.S. and Cabin Crew serving as aviation’s first responders around the world that these Flight Attendants have a strong voice at work,” said Sara Nelson, AFA International President.

Cathay Pacific’s Hong Kong based flight attendants are already unionized, and apparently their U.S. based cabin crew have among the lowest pay of any base. Supposedly their counterparts in the U.K. are paid 10% more, and their counterparts in Canada are paid 23% more. Of course we don’t know if that’s actual pay, total benefits packages, or what. It does seem odd that the Canadian crews make more than the U.K. crews, though.

Bottom line

It’ll be interesting to see what this unionization effort by Cathay Pacific’s U.S. based crews means for their future. I can see both sides here. On one hand, the reason Cathay Pacific has foreign bases is because the cost is lower, and it can save the airline money. At the same time, it seems like the U.S. crews have been paid disproportionately little, perhaps due to their lack of representation.

At the same time, if the costs go up significantly, Cathay Pacific might not find it worthwhile to keep a U.S. base, or at least not to grow it any further.

This mistake with Cathay Pacific’s social security contributions is a real problem, and something the airline needs to take responsibility for and make right, in my opinion. Cathay’s U.S. crews have good reason to be irked.

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About luckyBen Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

Comments

Does anyone know exactly how much these Cathay flight attendants make? I’m curious about all of the bases mentioned above (US, UK, Canada, HK). How does it compare to other airlines worldwide? Thank you.

CX is wrong here with social security And Medicare. Taxes in the US are based where you work not where your company is based, if CX is paying these employees on US payroll and sending them a W-2. Then they would be required to pay FICA. Airlines are tricky due to bases not always being where they work so I believe with airlines it is where the employee lives, so if they live in NY they have to pay FICA

Per the Union message: “We are excited for Cathay U.S.-based Cabin Crew to join with us to raise the standards for all Flight Attendants”. LOL

Yes, once they join the Association of Flight Attendants they will undoubtably become as friendly, helpful, and efficient as the FAs for UA and AA are now. 😉

And who wouldn’t want to be paid more so they can afford to pay union dues?

Frankly, I’m looking forward to my CP flight being cancelled when the FAs go on strike. That’s always fun when the LH workers do that.

Apparently it hasn’t occurred to them that CP can just begin to slowly move them back to a base in HKG, or even the Philippines, until the US Union has only a handful of FA left.

What surprises me most is that the UK based crews only make 10% more. The cost of living in London is way more than 10% above that of LA. And if those Canada based crews are in Vancouver, then ditto. Plus, they don’t get to keep the full 10% anyway, as increased pay means paying higher income taxes.

Finally, I’ve been reading a lot lately about slipping standards in both food and service with CP. Perhaps unionizing the US based crews will put a stop to that.

I happen to know how much US and HK based Flight Attendants make. My girlfriend is a CX flight attendant based in HK but wanting to switch to LA based in two years (guess not happening anymore).

US based FA gets paid ~$35,000 – $42,000 a year, which is sort of ridiculous in major west coast cities like LA and SF. You can get a job at let’s say your local Verizon store with High School diploma and get paid more than that. The low pay results in high turnover ratios; as a result, LA based crew can become purser maybe in just 2-3 years. Now they want to slash insurance and social security benefits.

The HK crew gets paid slightly more at around $40,000 – $45,000 but the older flight attendants have almost entire housing subsidized, and you can also just live in your home city and commute to HKG for work. 40k is considered to be good salary in Asia, and their insurance policy isn’t nearly as ridiculous as US.

If Cathay didn’t make the mistake of purchasing too much oil and then watch the oil prices drop, now they are losing tons of money and slashing benefits everywhere.

@ Robert Hanson – Sour grape much? UK based crew should get paid more then, no one said they are getting paid fairly. You “heard” about slipping standards on CX? Have you been on one recently? The US based crews normally operate the late night / midnight flights so why don’t you actually fly those ones before you criticize?

And yes, i’m familiar with US based airline crews, i fly ~80 -100 domestic segments a year for work. At least most of them are friendly.

@Brad B No, If a foreign employer hires staff who perform work on an aircraft not registered in the US, then they are not performing work in the US. Social security taxes are not owed on wages paid by a foreign employer to US citizens working “abroad,” regardless of their abode. For example, gate agents work in the US. If employed directly by CX, these workers would be covered by social security. But we are talking about a foreign-registered aircraft (this is, by definition, not “in the US”). There are international agreements with Canada, Japan, the ROK, and most countries in Europe for ironing out which country’s social security system covers which workers (and ensuring totalization of benefits). There is no such agreement with either China or the HK SAR.

It’s frankly inexcusable that an airline with such extensive foreign operations wouldn’t have lawyers and accountants on staff paid to know such things. Sure, US-based FAs can get their OAS and Medicare taxes refunded, but that doesn’t make up for years of earnings they would have gotten saving in their own IRA. (I’d add that to qualify for own-record benefits you must have at least ~$5000 in covered wages for at least 10 years. To be honest, this isn’t a very high hurdle to clear; many people start their careers with a large number of credits simply from summer jobs and part-time work along the way.)

From what I know a HK based CX BC(basic crew or bartender and cabin crew. Don’t know which one is right)’s salary is calculated on a hourly rate (I think with guaranteed minimum hours of work per month)
Block hours is 130hkd so 16.7usd
Ground hours is half of that
Allowances differs port from port but it is the number of meals times the cost to eat them at the 5 star crew hotel.
So the hardworking BCs would earn up to 25000hkd 3200usd (assuming 100 block hour). That’s a very entry level salary in hk. Normal fresh grads in hk earn only half of that, in tw 1/5 of that. Thus, if you are hired from other places say Taiwan or Philippines you get free accommodation for the first 3 years then 1000usd per month housing subsidy from the 4th year till the 8th year. To top these off, you get commissions if you are doing sales on the flight, and of course there’s full health insurance.
It is notable that KA crew’s salary will go beyond this even though their allowances are much much less(mostly turnarounds).

This is based on just one chat I had with an ex-CX turned AA FA…but US based CX FAs essentially are in a relatively lower wage/high pressure rat race environment (which contributes to the turnover). So when he got the opportunity/offer for AA as they started increasing their China/HK routes he bounced for better wages and working conditions. The move to AA was significantly less stressful.

Does it mean that service may “suffer”? Sure. But I’d rather wait an extra minute for my request if that means a better and more fair working environment for FAs. After all they aren’t slaves to our every whim.

Not required to and have to are different. CX isn’t required to pay social security and medicare, but that doesn’t mean they can’t do so if they so choose.

However, the reality is unless a FA works her/his whole career at CX, not paying into SS/M is a benefit. One needs only 40 quarters to qualify for SS/M payments. The return on the extra quarters and dollars paid into SS/M beyond the minimums sharply declines. So the FA is better off not paying SS/M for the time spent at CX, keeping the money (or better yet investing) and earning their 40 quarters elsewhere.

If CX wasn’t becoming so cheap (its standards are seriously declining) it wouldn’t “save” the employer contribution but opt to pay that to the FAs.

Just want to point out that most Filipino HK-Based crew actually live in HK, some actually have family in HK already and just come home to Manila for vacation. They are normally the senior ones, from ISM and SP and a few FP. Although I’ve met some who still have family in the Philippines, most that I have talked to through the years are actually HK Based. I’ve also met a few US-Based crew who migrated to the US after joining CX and changed base from HK to US.

By the way there are also some Filipino BC that are HK based, but they were born and raised in HK, and are very fluent in Cantonese, English and Filipino/Tagalog.

– Most Filipina crew are leftovers from the 90’s era and are senior (soon to retire). Local crews are mostly HK locals and Mainland Chinese and this is current policy. CX is localizing to cut costs and based on pax preference.

– HK Crews get paid much less than US counterparts and with less benefits compared to US crew.

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About Lucky

Ben Schlappig (aka Lucky) is a travel consultant, blogger, and avid points collector. He travels about 400,000 miles a year, primarily using miles and points to fund his first class experiences. He chronicles his adventures, along with industry news, here at One Mile At A Time.

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